Since the introduction of the general purpose credit card in the 1950's, consumers have had an increasing number of options for paying for goods and services. The credit card, for example, provided the consumer with an opportunity to pay for goods and services using future money, or money the consumer had not yet earned. Frequent flyer or frequent purchaser programs have allowed consumers to redeem earned miles or points towards goods, services or value add-ons to purchased items. These miles or points are not necessarily tied to a currency equivalent value. Debit cards, introduced in the 1970's, have made it possible for consumers to purchase items using their own banked funds, much like a replacement for cash.
Recent legislation and worldwide banking and industry practices are providing a clear indication of the foreseeable future representation of money—i.e., representation in an electronic format.
There are many examples from recent years of the transformation from a paper-based money system to an electronic one. In the consumer setting, the Internet has given many consumers the option of shopping in the comfort of their own homes, workspaces, or even while mobile. Typically, an Internet shopper will provide his or her credit card information when making an “online” purchase. The credit card information is validated before the service proceeds to record the transaction and consummate delivery of the purchased product or service to the consumer.
The particular commercial application often determines the form in which information and representations of value are transferred in electronic commerce. In some commercial applications, there are several methods for executing transactions electronically, each with their own way of handling information and representations of value. For example, a pre-pay mobile phone subscriber has several options for depositing funds to or “topping up” his or her account.
First, a user may purchase a voucher at a retail location, whereupon the user may dial the phone number on the card and interact with either a live voice or an interactive voice response (IVR) system to add the voucher's value to his or her account. The user's account number is typically the same as his or her phone number. A second means of topping up a mobile phone account is via magnetic stripe card. In this example, the user provides their mobile phone service provider with billing and personal data to set up an account, and receives a magnetic stripe card, much like a credit card, from the service provider. When the user desires to top up their account, the user provides payment at a retail location along with their card. The retail clerk then swipes the card and keys in the amount corresponding to the user's payment, and the user's mobile phone account becomes credited in the amount of payment. As in the voucher method, the user's account number can be his or her phone number. A third method of top up allows the user to charge their top up to another account using the services of an automated teller machine (ATM). In this method, the user swipes his or her credit card, then indicates (through card swipe or key entry, for example) his or her mobile service provider, telephone number and amount of top up in order to credit their account.
In each case, information is transferred in different ways, and the representation of value takes different forms. In the voucher system, identification information may be provided by voice or keypad entry, while in the magnetic stripe card system, identification information is represented on the magnetic stripe card. Also, in the voucher system, value is represented in the voucher itself, while in the magnetic stripe system, value is represented by the number keyed in at the retailer location. In either case, the user can receive a printed receipt for payment at the retail location, and the user may also receive a text or other message on their mobile device from their mobile service provider, confirming the top up transaction.
Drawbacks arise in each case as well. While the paper-based voucher system may better maintain user anonymity, it also creates inventory problems for retailers, theft problems for retailers and users, and requires resource expenditures (e.g., live support or IVR system) for the mobile phone service provider. The magnetic stripe card system avoids the inconvenience of having to dial into an IVR system to activate the top up, but requires that users carry around an additional card in their wallets and register personal and billing data. This system has proven highly unappealing to users desiring to protect their personal information.